Citibank India & SKS Announce USD 44 Million Rural Microfinance Program
Thursday, May 10, 2007
SKS Microfinance and Citibank today announced a USD 44 Million (Rs.1.8 Billion) groundbreaking financing program involving Citibank India purchasing loans that are originated by SKS. Representing Citibank’s increased foray into rural microfinance, the program will deliver income-generating loans of between Rs.5000 to Rs.20,000 to a population of over 200,000 unbanked customers spread across 7,000 villages in 11 States of the country by financial year 2007-08. The partnership combines SKS’ robust customer acquisition and management model with Citi’s extensive experience in financial structuring for microfinance institutions, networks and investors in emerging markets to fulfill a shared objective of greater financial inclusion and poverty alleviation through commercially viable and sustainable lending programs.
The highlight of the Citi-SKS agreement is in the fact that each individual loan originated by SKS is purchased by Citibank which shares credit risk in the transaction. Grameen Foundation (GF), as part of its global USD 50 million Growth Guarantees program launched in late 2005, will provide a limited guarantee to SKS and be an integral element of the innovative risk-sharing structure. This global guarantee program recognizes and responds to the needs of growing microfinance institutions in India, such as SKS, and encourages sector participants to expand their portfolio and presence through expanded access to local banking finance.